Will 3D Printing Create Liability Coverage Gaps?

The 3D printing industry is expected to grow by more than 31% per year between 2014 and 2020, according to Wohlers Report 2015.

3D printing’s implications for property-casualty insurance are unclear, especially as auto, aerospace and even food industries adopt what now “must be recognized as mainstream technology,” says Robert Weireter, senior casualty treaty underwriter, Swiss Re.

While its open platform may increase the risk of cyberattack, in other ways, 3D printing could reduce risk—especially when it comes to product liability. “The ability to produce customized products is one of the key attributes,” Weireter says. “It is anticipated that a custom product will perform better than a stock product.”

Not to mention, 3D printing reduces product development time, wastes less material and eliminates the need for stockrooms full of inventory.

But the process may also complicate this coverage. “Two of the basic components of product liability are design defect and manufacturing defect. Traditionally, these are separate, but with 3D printing they are much more closely connected,” Weireter explains. “Determining legal liability becomes more complex. It may not be clear if the 3D printing is a product or a service.”

But Michael Hohmann, global liability head at Allianz Global Corporate & Specialty (AGCS), says 3D printing is just another source to consider when determining who or what is liable. “Was it design? Was it the supplier, the 3D printer or the raw material used? Right now, you have everything in one hand,” he explains. “Later, you may have more parties involved.”

Juergen Weichert, head of global product development at Allianz, agrees. “It’s just a different production process,” he explains. “When you print a product, each time it’s a little different. But as long as each product is checked and fits its purpose, nothing changes from the way we analyze other products.”

Keep in mind that both small and large industrial companies use 3D printing—which means you should address it with all commercial clients.

Jordan Reabold is IA assistant editor.

Personal Problems

While it’s too early to tell whether 3D printers will become commonplace in people’s homes, those who do invest in one must consider the exposure that comes with it. One concern is the material that comprises the products, which “can emit various types of odors or fumes,” Weireter says. “And the machines can get hot.”

According to Michael Bruch, head of emerging trends, AGCS, the main concerns will involve a user selling their products or violating intellectual property laws. —J.R.